Supporting Facility and Process Flow (OSCM 303) PDF

Supporting Facility and Process Flow Creating the Right Environment OSCM 303  Learning Objective ✓ Describe the impact of the “services cape” on the behavior of customers and employees. ✓ Identify and discuss the three environmental dimensions of servicescapes. ✓ Id...

Supporting Facility and Process Flow Creating the Right Environment OSCM 303  Learning Objective ✓ Describe the impact of the “services cape” on the behavior of customers and employees. ✓ Identify and discuss the three environmental dimensions of servicescapes. ✓ Identify the six critical design features of a service supporting facility. ✓ Draw a process flow diagram of a service process. ✓ Identify the bottleneck operation in a product layout, and regroup activities to create new jobs that will increase the overall service capacity. ✓ Use operations sequence analysis to determine the relative locations of departments in a process layout that minimize total flow-distance.  Introduction Facility design is successfully used for many years to differentiate the company from its competitors. Facility design is central to the focus strategy of targeting a particular market and creating a unique ambiance (atmosphere). Ex: A retail store first must attract customers and then guide them through the store with eye-catching products in a pleasant environment that holds their attention. Introduction Environmental psychology applied to facility design and layout to avoid customer disorientation and frustration upon entering an unfamiliar structure. The concept of servicescapes is based on the idea that the physical environment influences the behavior and perception of the service for both customers and workers.  Environmental Psychology and Orientation Orientation is the first behavioral need of an individual on entering a place. (e.g., “Where am I?” or “Where to go?”) When entering a physical setting, customers gain control when they can use spatial cues (signal), along with previous experience, to identify where they are, where they should go, and what they need to do. Anxiety and a sense of helplessness can result if spatial cues (signals) are not present or previous experience cannot be used to avoid disorientation.  Environmental Psychology and Orientation Using formula facilities, franchised services have removed the anxiety of disorientation so that customers know exactly what to do. Examples?? Orientation also can be aided by facility designs that allow customers to see both into and through the space. Examples?? Orientation aids and signage such as “You Are Here” maps can be effective as well.  Servicescapes Servicescapes is “the environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service”. Servicescapes The physical environment or servicescape of the supporting facility influences both customer and employee behavior and should be designed in alignment with the service concept. Servicescapes Mix of environmental dimensions consisting of (1) ambient (surrounding) conditions, (2) space/function, and (3) signs/symbols describes the servicescapes, which is viewed as a holistic environment by customers and employees.  Servicescapes Designing Physical Surroundings to Affect Employee and Customer Behavior  Ambient Conditions: background characteristics such as noise level, music, lighting, temperature, and scent. Ex: Atmosphere in Restaurant, Waiting Line in Disney Land, Waiting areas in Clinic.  Spatial Layout and Functionality: The arrangement of furnishings and equipment and the relationships among them create a visual and functional landscape for delivery of the service. Ex: Fast food Restaurants and the design of self-service activities.  Servicescapes  Signs, Symbols, and Artifacts: Many items in the physical environment serve as explicit or implicit signals that communicate acceptable norms of behavior.  Explicit signs such as “no smoking” communicate rules of behavior, whereas “recycle bins” encourage responsible acts  Facility Design Service operations can be affected directly by the design of the facility. Design and layout represent the supporting facility component of the service package. Six factors influence design: (1) The nature and objectives of the service organization: The nature of the core service should dictate the parameters of its design. Ex: fire station must be large enough to house its vehicles and accommodate 24-hour shifts. (2) Land availability and space requirements: The land that is available for a service facility often comes with many constraints, such as costs, zoning requirements, and actual area. Good design must accommodate all these constraints. Facility Design (3) Flexibility: Successful services are dynamic organizations that can adapt to changes in the quantity and nature of demand. Flexibility might consider ability to “designing for the future.” (4) Security: Special design for security enhancement. Ex: Airports security measures after the terrorist attack of September 11, 2001. (5) Aesthetic: have a marked effect on the consumer’s perceptions and behaviors, but affect also the employees and the service they provide. (6) The community and environment: facility design can be in gaining community and environment acceptance of a service.  Process Analysis Terminology Flowcharting (Definition): The ability to diagram a process, identify the bottleneck operation, and determine the system capacity are fundamental skills in managing service operations and making improvements. “If you can’t draw it, then you don’t really understand it.”  The final diagram is useful for training, helping to coordinate activities between functions, and facilitating creative ideas for improvement.  Process Analysis Terminology Terminology for Process Analysis Cycle Time is the average time taken to complete a single unit. Bottleneck is the factor that limits production usually it is the slowest operation. An hour lost at the bottleneck is an hour lost in system output. The bottleneck could arise from several sources such as labor availability, information, and, most importantly for services, the rate of customer arrivals. Capacity is a measure of output per unit time when fully busy. Capacity Utilization is a measure of how much output is actually achieved. Throughput Time is the time to complete a process from time of arrival to time of exit. It is the time for goods to go through the whole process. Process Flow Diagram of Mortgage Services Example 5.1 Mortgage Service The purchase of real estate usually involves taking out a loan or “mortgage” on the property. The lending institution requires an accurate description of the property and proof that the title is clear of any outstanding liens. Furthermore, the credit worthiness of the buyer must be determined. Many independent mortgage service firms offer these services. The Flowchart shows a simplified process flow diagram of the mortgage application process. Because we intend to use this example to illustrate process terminology such as the bottleneck operation and throughput time, we include the cycle time (CT) of each activity (i.e., the average time in minutes to perform the activity) in the diagram. Process Flow Diagram of Mortgage Services Example 5.1 Mortgage Service Bottleneck: Property Survey Capacity: 5.33 per 8-hour day Capacity Utilization = 5/5.33 =94% Throughput Time >= 105 min We can reduce the time and improve efficiency by assigning more employees to the bottleneck.  Process Flow Diagram of Mortgage Services The capacity of the Title Search activity is 2 applications per hour because each application takes 30 minutes to process. The capacity of the entire system is determined by the bottleneck capacity. The bottleneck is the slowest operation (or longest CT). Property Survey is the bottleneck in the mortgage process with the longest CT= 90 minutes. Thus, the system capacity is (60 minutes/hour)(1/90 minutes) = 2/3 applications per hour OR 5.33 applications per 8-hour day  Facility Layout The layout (arrangement) of the service delivery system is important for the convenience of the customer as well as the service provider. A well-balanced line would have all jobs be of nearly equal duration to avoid unnecessary idleness and inequity in work assignments. Flow Process Layout and the Work Allocation Problem Example 5.2 Automobile Driver’s License Office The state automobile driver’s license office is under pressure to increase its productivity to accommodate 120 applicants per hour with the addition of only one clerk to its present staff. The license renewal process currently is designed as a service line, with customers being processed in the fixed sequence listed in Table 5.2. Activity 1 (i.e., review application for correctness) must be performed first, and activity 6 (i.e., issue temporary license) must be the last step. Activity 5 (i.e., photograph applicant) requires an expensive digital camera and color printer. Activity Description Cycle Time, Sec. 1 Review application for correctness 15 2 Process and record payment 30 3 Check for violations and restrictions 60 4 Conduct eye test 40 5 Photograph applicant 20 6 Issue temporary license 30 Flow Process Layout and the Work Allocation Problem Example 5.2 Automobile Driver’s License Office The state automobile driver’s license office is under pressure to increase its productivity to accommodate 120 applicants per hour with the addition of only one clerk to its present staff. The license renewal process currently is designed as a service line, with customers being processed in the fixed sequence listed in Table 5.2. Activity 1 (i.e., review application for correctness) must be performed first, and activity 6 (i.e., issue temporary license) must be the last step. Activity 5 (i.e., photograph applicant) requires an expensive digital camera and color printer. Activity Description Cycle Time (Sec) Capacity (per Hour) 1 Review application for correctness 15 = (60/15)*(60 min) = 240 applicants 2 Process and record payment 30 = (60/30)*(60 min) = 120 applicants 3 Check for violations and restrictions 60 = (60/60)*(60 min) = 60 applicants 4 Conduct eye test 40 = (60/40)*(60 min) = 90 applicants 5 Photograph applicant 20 = (60/20)*(60 min) = 180 applicants 6 Issue temporary license 30 = (60/30)*(60 min) = 120 applicants Flow Process Layout and the Work Allocation Problem:  Design #1: Present Process Flow Diagram  Bottleneck activity #3  Requires 6 employees  Capacity: 60 application per hour Activity Description Cycle Time (Sec) Capacity (Applicants per Hour) 1 Review application for correctness 15 = (60/15)*(60 min) = 240 applicants 2 Process and record payment 30 = (60/30)*(60 min) = 120 applicants 3 Check for violations and restrictions 60 = (60/60)*(60 min) = 60 applicants 4 Conduct eye test 40 = (60/40)*(60 min) = 90 applicants 5 Photograph applicant 20 = (60/20)*(60 min) = 180 applicants 6 Issue temporary license 30 = (60/30)*(60 min) = 120 applicants Flow Process Layout and the Work Allocation Problem: By focusing only on the bottleneck, one might think that assigning an additional clerk to perform activity 3 would double the flow through the bottleneck and achieve the goal of 120 applicants per hour. However, the flow for this system would be limited to 90 applicants per hour, because the bottleneck would shift to activity 4. The proposed process design (b) with seven clerks, can achieve the desired capacity of 120 applicants per hour, because activities 1 and 4 have been grouped together to create a new job. Flow Process Layout and the Work Allocation Problem: Process Flow Diagram  Design #2: Proposed Process Flow Diagram  Bottlenecks: on 3 activities (3,2,6)  Requires 7 employees  Capacity: 120 applications per hour Flow Process Layout and the Work Allocation Problem: How did we know to group these two activities together?  First, remember that a flow rate of at least 120 applicants per hour must be achieved at each step in the process.  Because activities 2 and 6 already are being performed at this rate, they need not be considered further.  An additional clerk is required to perform activity 3.  However, because we can achieve a combined flow rate of 120 applicants per hour only if two clerks work in parallel. Flow Process Layout and the Work Allocation Problem:  By combining activity 1 (15 seconds) with activity 4 (40 seconds), we can achieve a combined job requiring 55 seconds per applicant (or a flow rate of 65 applicants per hour).  Note that this solution requires the acquisition of one additional eye-testing machine.  Another solution would be to combine activities 4 and 5 to create a job yielding a flow rate of 60 applicants per hour; however, an additional expensive camera would need to be purchased. Flow Process Layout and the Work Allocation Problem:  If money were available to invest in computers, additional eye- testing equipment, and cameras, then the entire process could be reengineered.  Consider training each clerk to perform all five activities with a combined time of 165 seconds, or an individual flow rate of approximately 22 customers per hour.  Now, an arriving customer would be faced with choosing from among six clerks working in parallel (Figure 5.7). Flow Process Layout and the Work Allocation Problem: Flow Process Layout and the Work Allocation Problem:  This system would be appealing to customers because one clerk would handle all the transactions (customers would not be passed from one clerk to another and be required to wait in between).  Further, one would expect that the total time could be shortened because information would not need to be repeated as before.  Finally, staffing of the office would now be flexible because only the number of clerks required to meet anticipated demand need be on duty.  This savings in labor could justify the investment in six work-stations. Job Shop Process Layout and the Relative Location Problem Example 5.3 Ocean World Theme Park The architect for Ocean World is beginning to formulate plans for the development of property outside New Orleans, Louisiana, for a second marine theme park. Because of the hot and humid gulf weather during the summer months, ways to minimize the visitors’ total travel distance between attractions are being considered. Data showing a typical day’s flow of visitors between attractions at San Diego are given in the table below and will be used in the layout planning. Job Shop Process Layout and the Relative Location Problem  Operations Sequence Analysis will be used to identify a good layout for this relative location problem.  This method uses as input the matrix of flows between attractions and a grid showing the geographic center location for attraction assignments.  In Table 5.3, we have created a triangular form of the original flow matrix to sum the flows in either direction because we are interested only in the total. Job Shop Process Layout and the Relative Location Problem  The heuristic begins with an initial layout (Figure A).  This initial layout is arbitrary but could be based on judgment or past experience.  Attractions with high daily flow between them should be placed adjacent (close) to each other.  For example, we cannot see a need to place A adjacent to D, but it would be appropriate to place A close to C. Job Shop Process Layout and the Relative Location Problem  For nonadjacent attractions, the flow between them is multiplied by the number of grid squares that separate the attractions.  These products are summed to arrive at a total flow distance of 124 for this initial layout.  Considering the large contribution made to this sum by the separation of attractions A and C, we decide to move C adjacent to A (beside) to form the revised layout (Figure b), with a total flow distance of 96. Job Shop Process Layout and the Relative Location Problem  The revised layout (Figure C) is the result of exchanging attractions A and C.  This exchange has placed attraction C adjacent to attractions D, E, and F, thereby reducing the total flow distance to 70.  However, the nonrectangular layout in (Figure C) is not acceptable for the real estate.  Thus, the final layout (Figure D) is created by exchanging attractions B and E and by moving attraction F to form a rectangular space. Job Shop Process Layout and the Relative Location Problem Job Shop Process Layout and the Relative Location Problem  Operations Sequence Analysis Heuristic  The departmental exchange logic of operations sequence analysis was incorporated into a computer program known as CRAFT (Computerized Relative Allocation of Facilities Technique).  CRAFT has been used extensively in service layout planning—for example, in insurance offices, hospitals, movie studios, and universities.